A restrictive endorsement results when the payee signs on the back for deposit only and signs his or her name.
What is a Restricted Account?
A restricted account is a margin account that has less than the minimum amount of equity allowed by Regulation T or the individual brokerage's rules (if higher). When the aggregate market value of shares purchased on margin falls below the amount of the loan used to acquire them, the situation develops.
When this account is sold, the proceeds are used to make up the difference. The limitation is withdrawn once the gap is cleared, and the account owner can resume making purchases.
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